Social

Part 1: Multiple choices 10 items // 30 pts

Part 2: Analysis – Read article & Answer (the answer is in the article) // 12 pts
Part 3: Writing – Opinion // 18 pts
1. What do you think the government should do to reduce unemployment?
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2. What economic problem that you think affects the most? Why? Vine? Gin? or Martini?
. . . "Shaken, not stirred"
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 Social
Inflation – The price of products and services increase but the value of money decrease.

Levels of inflation
1. Low Inflation – price of goods and services increases less than 5% /year, encourage
more production and is motivation to expand production and employment
2. Moderate inflation – price of goods and services increases more than 5%/year but less
than 20% per year (people suffer from the higher cost of living)
3. High inflation – prices of goods and services increase more than 20% per year, the
value of money decreases, producers hesitate to invest, and citizens are more careful
in spending (there is an economic recession)

Causes of Inflation
1. Prices of goods and services increase (cost of production is high)
2. More money (wealth of the citizen increases, the price of goods and services
increases)
3. The need for products and services increases. (demand increase and consumers'
spending behavior changes
4. Economic Growth (not enough goods or services to meet consumers' need)
5. Tax is high (cost of production is high and low supply)

Effects of Inflation
1. Lack of economic stability, unemployment, lack of funds
2. Money has less purchasing power
3. Entrepreneurs get more profit
4. Citizens have less savings
5. Citizens have don't have enough income to match their expenses
6. Citizen spends less because the value of money of less
 Social
Deflation – The price of products and services decreases.

Levels of Deflation
1. Low deflation – prices of goods and services decreases less than 5% per year
2. Moderate deflation – prices of goods and services decreases more than 5% but less
than 20% per year
3. High deflation – prices of goods and services decreases more than 20% per year

Causes of Deflation
1. Citizens lack money to buy goods and services
2. There is less money in the system
3. The government collets high taxes
4. Citizens keep their money
5. The government uses and overbalanced budget
6. The Bank of Thailand has a strict policy
7. Financial institutions are strict on how to loan credit to entrepreneurs

Effect of Deflation
1. Real interest rates rise
2. Real level of debt rises
3. Pressure for lower wages
4. Declining business profits
5. Rise in cyclical unemployment
6. Improved price competitiveness

Ways to Solve Deflation

1. Increase liquidity in the economic system (buy bonds back from citizens)
2. Decrease savings interest so people withdraw money to spend
3. Reduce tax
4. Increase government spending
5. The Central bank should print money
6. Control the price of consumers products
7. Promote products to export
8. Have income less than expense in order to reduce debt and increase spending
 Social
Unemployment(ว่างงาน) – no job/work

Types of Unemployment:
1. Frictional – Too many graduates
2. Seasonal – Usually happens for farmers (planting seasonal crops)
3. Hidden – Can’t find a job that is suitable for your skill
4. Structural
5. Cyclical

Effect of Unemployment:
• Social – Conflict, Criminals
• Economic – No money flow, No investment